Question

Proper segregation of duties reduces the opportunities to allow any employee to be in a position to both: a.

Record and conceal fraudulent transactions in the normal course of assigned tasks.
b.
Monitor internal controls and evaluate whether the controls are operating as intended.
c.
Adopt new accounting pronouncements and authorize the recording of transactions.
d.
Journalize cash receipts and disbursements and prepare the financial statements.

Answer 1

The correct answer is option A 'Record and conceal fraudulent transactions in the normal course of assigned tasks,' which refers to the importance of segregation of duties in financial controls to prevent fraud.

Step-by-step explanation:

The question is asking about the importance of segregation of duties in an organization, particularly in the context of accounting and financial controls. Segregation of duties is a key internal control mechanism designed to reduce the risk of fraud and error by ensuring that no single individual has control over all aspects of a financial transaction.

Proper segregation of duties reduces the opportunities for an employee to both record and conceal fraudulent transactions in the normal course of assigned tasks. It means that one person should not be responsible for multiple steps in the process of financial recording and oversight. For example, the person who authorizes transactions should not be the same person who records them.

Therefore, the correct answer is:

a. Record and conceal fraudulent transactions in the normal course of assigned tasks.